Your First Legislative Update of 2019!
And they’re off!
The new legislature is off and running with committee hearings, fiscal briefings and a hoped-for June 27 finish line. Republican Governor Chris Sununu was re-elected, but both the House and Senate now have Democratic majorities. Divided government is not unusual in New Hampshire, but this is the first time in many years that a Republican governor will be working with a Democratic House and Senate, as well as a Democratic majority on the Executive Council. Both parties have projected an atmosphere of comity, but will it last? Will the legislature craft a budget that is to Governor Sununu’s liking by the end of June? The Governor has indicated he is not averse to vetoing the budget. A potential clash of priorities looms as Democrats have proposed several tax increases, rollbacks and spending provisions.
The Democrats have already set their priorities for 2019. The new majority will push for an increase in the minimum wage, also called the living wage, a proposal that failed to gain traction under past Republican majorities. And while Democrats are pleased that more money is flowing to education, child welfare and the mental health and opioid crisis issues, they are unsatisfied by the amounts, and they have larger appropriations in mind. Democrats opposed Republican-led passage of business tax rate reductions in recent years and have offered legislation that would repeal them or freeze them at present levels. Governor Sununu, in his Inaugural Address, said the cuts have been key to the economic success the state has enjoyed, and he favors keeping them in place. A GOP bill to reduce interest and dividend taxes is likely dead, as are any further notion of business tax cuts, education choice and right to work legislation.
The Big Three
Three high-profile proposals that have drawn some bi-partisan support in recent years but failed to reach the finish line will make another run for the roses this year. They are: legalizing recreational marijuana, abolishing the death penalty and a paid family and medical leave program. Governor Sununu has promised to veto at least two: marijuana legalization and repeal of the death penalty. Some version of a family leave program is supported by many, including the governor, but the devil was in the details last session, and it failed to pass. The legislature will try again this session.
We’re in the money…at least for now
The Legislative Budget Assistant, the Department of Revenue, the State Treasurer and other fiscal gurus speaking at House and Senate financial briefings this week told legislative leaders that the state is in very good fiscal shape. A budget surplus, a Rainy Day Fund that is brimming at a historic high and a strong economy were highlights of the meetings, but there were also words of caution. As is the case nationally, higher interest rates, volatile equity markets, a cooling housing market and a recession that is a case of “not if, but when” were all mentioned.
More and more bills are being released and scheduled for public hearings as January progresses. Legislative committees will continue to meet next week. The House and Senate have not yet set dates for their first full sessions.